The Impact of Health Care Trends on Ambulatory Surgery Center (ASC) Revenue
Changes in the health care industry are as inevitable as death and taxes. New trends emerge so frequently, it’s nearly impossible to differentiate between those you should pay attention to and others you can ignore. Ambulatory surgery center (ASC) owners and administrators need to focus their attention on three trends that are poised to have a significant impact on cash flow and revenue.
ASC Challenges and Trends
Like many in the health care industry, ambulatory surgery centers are faced with a number of challenges affecting the bottom line: higher patient volumes, constantly evolving formulas for reimbursement, an increasing number of payers and a regulatory environment that is forever in flux. In order to be prepared for these issues, ASC owners and administrators should keep a close eye on the following health care trends and anticipate their potential effect on your practice.
- Price transparency. The drive for increased price transparency among health care providers continues to pick up steam as patients, burdened with higher premium costs, deductibles, and coinsurance payments, are demanding to know up front what their costs will be before committing to a procedure. This is especially true if their surgery is elective. Effective January 1 of this year, in an effort to improve transparency, the Centers for Medicare & Medicaid Services implemented new regulations requiring providers to list charges for procedures online. Some states, such as Florida, have instituted even more stringent requirements. ASCs will need to take a close look at operational data and current costs in order to create a reasonable and appropriate fee schedule for patients, one that can be customized for each patient depending on their specific insurance coverage and benefits. Providing up-front estimates is a great way to ensure you meet patient expectations regarding transparency and will also help in your collection efforts.
- New financing options. With the burden of health care costs shifting to patients, new financing options are becoming necessary. Consider a 2018report by the Federal Reserve that showed 4 in 10 adults would be unable to afford an emergency expense of $400. If that’s the case, coming up with money to pay deductibles and coinsurance costs will be even more of an uphill climb. To counter this, many providers are coming up with patient payment plans that allow consumers to make smaller installment payments over time. Deciding if such an approach is right for your ASC requires taking a look at your typical uncollectible patient debt and deciding if the third-party costs associated with an installment-type plan would be worth it to limit the long-term financial risk involved in uncollected payments.
- Patients aren’t the only ones worried about higher health care costs. Employers are also on the hook, with rising health care premiums cutting into their profit margins. Some are even ditching the middleman entirely by choosing to contract directly with providers. You’ll have to analyze revenue trend data and patient demographics to decide whether this type of self-insurance arrangement will work for your ASC.
- Price transparency. The drive for increased price transparency among health care providers continues to pick up steam as patients, burdened with higher premium costs, deductibles, and coinsurance payments, are demanding to know up front what their costs will be before committing to a procedure. This is especially true if their surgery is elective. Effective January 1 of this year, in an effort to improve transparency, the Centers for Medicare & Medicaid Services implemented new regulations requiring providers to list charges for procedures online. Some states, such as Florida, have instituted even more stringent requirements. ASCs will need to take a close look at operational data and current costs in order to create a reasonable and appropriate fee schedule for patients, one that can be customized for each patient depending on their specific insurance coverage and benefits. Providing up-front estimates is a great way to ensure you meet patient expectations regarding transparency and will also help in your collection efforts.
- New financing options. With the burden of health care costs shifting to patients, new financing options are becoming necessary. Consider a 2018report by the Federal Reserve that showed 4 in 10 adults would be unable to afford an emergency expense of $400. If that’s the case, coming up with money to pay deductibles and coinsurance costs will be even more of an uphill climb. To counter this, many providers are coming up with patient payment plans that allow consumers to make smaller installment payments over time. Deciding if such an approach is right for your ASC requires taking a look at your typical uncollectible patient debt and deciding if the third-party costs associated with an installment-type plan would be worth it to limit the long-term financial risk involved in uncollected payments.
- Patients aren’t the only ones worried about higher health care costs. Employers are also on the hook, with rising health care premiums cutting into their profit margins. Some are even ditching the middleman entirely by choosing to contract directly with providers. You’ll have to analyze revenue trend data and patient demographics to decide whether this type of self-insurance arrangement will work for your ASC.